Reaching the End Consumer

Question 1

List the major types of retailers.

Answer 1

Supermarkets
Deep discounters
Convenience retailers
Specialist wine retailers
Hybrids
Online retailing
Global travel retail
Wine investment companies

Question 2

What are the advantages to selling wine through a supermarket?

Answer 2

Attractive opportunity to sell a large volume of wine with high levels of market exposure. Producers may also benefit from winemaking expertise provided by the retailer.

Question 3

What are some of the disadvantages of using a supermarket as a retailer?

Answer 3

Producers expected to pay fees to have their wine stocked by the supermarket and for additional promotion. They are also expected to pay for price promotions.
Contracts have strict requirements and producers may be delisted resulting in substantial loss of sales.

Question 4

Describe the advantages of using a specialist wine retailer to sell wine.

Answer 4

They focus on smaller producers from less known regions and varieties.
They cater to high involvement consumers and offer a higher margin to producers.

Question 5

What is the disadvantage to using a specialist wine retailer to sell wine?

Answer 5

Usually producers must use a broker or distributor to get the wines into the shop.

Question 6

Describe the advantages to using a hybrid model for a retail establishment.

Answer 6

Consumers can try wines before they decide to buy, encouraging consumers with less wine knowledge to purchase wines they would not have otherwise bought. Also, wine by the glass has very high margins.

Question 7

Describe the disadvantage to a hybrid retail model.

Answer 7

The retailer needs to stay open later in the evening and requires additional staff to serve customers. Also, additional bureaucracy with this model.

Question 8

What is the significant disadvantage to online retailers?

Answer 8

Wine is a heavy, bulky, fragile product. Delivery costs are higher then other items. Also, there is a risk the product will be lost or damaged in transit.
Customers are demanding quicker delivery times.

Question 9

What are the advantages to online retailing?

Answer 9

No need for expensive retail shops. Warehouses can be located in low cost areas. They can stock a more varied range of wines.
They can have a much broader customer base.

Question 10

List the three types of restaurants.

Answer 10

1. Non-destination (e.g. Appleby’s)
2. Casual dining (e.g. SER)
3. Fine dining (e.g. Daniel)

Question 11

What are the three categories of the three-tiered system?

Answer 11

1. Control – The state controls one or more of the tiers
2. Franchise – Restrict the freedom of suppliers to change distributor arrangements.
3. Open – Suppliers and distributors are free to enter into and exit out of agreements freely.

Question 12

What is the aim of the monopoly system?

Answer 12

To limit the consumption of alcohol.